23 July 2015
timing difference happens when a particular expense is permitted in income tax in one financial year and in books of accounts in another financial year...for eg: depreciation..because of difference in depreciation rates, there are variation but at the end of the day whole of the deprecation is allowed. so its a timing difference
where as some expenses/income may be allowed in income tax and not allowed at all in books of accounts or vice-versa. such differences are permanent difference. this could difference like dividend incomes that are exempt in income-tax but included in incomes in profit & loss account.